Four Corners Property Trust, Inc. · NYSE:FCPT
Four Corners Property Trust — Investor Presentation (October 2019)
31 slides from Four Corners Property Trust's investor presentation, Oct 31, 2019
Slide 1: Four Corners Property Trust Investor Presentation October 2019
FOUR CORNERS PROPERTY TRUST NYSE: FCPT INVESTOR PRESENTATION | OCTOBER 2019 www.fcpt.com 1 | FCPT | OCTOBER 2019
Slide 2: Forward Looking Statements and Disclaimers
FORWARD LOOKING STATEMENTS AND DISCLAIMERS Cautionary Note Regarding Forward-Looking Statements: This presentation contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements include all statements that are not historical statements of fact and t
Slide 3: Agenda
AGENDA Company Overview and Business Update Page 3 Key Investor Highlights Page 14 Appendix Page 20 3 | FCPT | OCTOBER 2019
Slide 4: Overview of FCPT
OVERVIEW OF FCPT FCPT is the only public net-lease REIT focused primarily on the acquisition and ownership of high-quality restaurant properties FCPT’s portfolio consists of 6501 properties under long-term, net leases that are diversified by geography and brand; 421 of these properties are lease
Slide 5: Company Momentum Since Inception in November 2015
COM PAN Y M OM ENTUM SINCE INCEPTI ON I N NOV E MBER 2015 At Inception As of 9/30/2019 Team Members 4 +15 19 +$36.5 million / Annual Base Rent1 $94.4 million $130.9 million +38.7% Properties 418 +232 / +55.5% 650 Brands 5 +36 41 Tenant EBITDAR to 4.2x +0.6x 4.8x Rent Coverage % Darden 100% -26% 74%
Slide 6: High Quality Portfolio
HIGH QU ALI TY P OR TFOLI O FCPT Portfolio Summary • 650 Properties Properties: • 75% Investment grade tenancy • 41 brands • 45 states Casual, Family Geography: • Highly diversified by geography with largest markets & Fine representing only 12.0% (Texas) and 11.1% (Florida) of NOI Dining • 11.5 year
Slide 7: Company Momentum Since Inception in November 2015
COM PAN Y M OM ENTUM SI NCE INCEPTION IN NOV EM BER 2015 Market Access & Capital Raising Highlights since inception • Total shareholder return (share price appreciation and dividends1) since spin-off of +155% • Demonstrated access to the full range of capital markets with $428 million of equity and
Slide 8: Summary Capitalization and Financials
SUMMARY CAPITALIZATION AND FINANCIALS 1 Capitalization FCPT Current Trading Metrics FCPT Current 3 ($ million, except per share) Current1 Annual Base Rent ($ million) $130.9 Share price (9/30/2019) $28.28 Implied Cap Rate 5.1% 4 Shares and OP units outstanding (millions) 68.7 Price / AFFO Multiple 1
Slide 9: Outparcel Strategy: Recap and Update on Announcements
OUTPARCEL STRATEGY: RECAP AND UPDATE ON ANNOUNCEMENTS Mall / shopping center outparcels are typically low rent, ground leased properties, with strong brands, and corporate operators and lease guarantors FCPT has closed on $88.0 million / 56 properties of outparcel transactions since October 2017
Slide 10: Run-Rate Base Rent Bridge
RUN-RAT E BASE RENT BRIDGE Estimated Annualized Base Rent ($mm) $141.7 $130.9 $160.7 million of pipeline via large outparcel portfolios FCPT WPG I WPG II Brookfield Seritage FCPT+ 2 (9/30/2019)1 (remaining) (remaining) Announced 1. Represents current scheduled minimum contractual cash rent as of 9/3
Slide 11: FCPT Evolution Since Spin-Off: Tenant Diversification
FCPT EVOLUTION SINCE SPIN- OFF: SIGNIFICANT PROGRESS ON TENANT DIVERSIFICATION Brand Exposure by Annualized Base Rent (ABR) 15% 15% 3 106 leases 111 leases Other Darden 3 3% 20% 3% Other Darden 14 leases 104 leases Other Darden 13 leases 8% 6% 8% 52% 57 leases 14 leases 56% 53 leases 74% 305 leases
Slide 12: Funding the Pipeline
FUNDING THE PIPELINE Between the existing $46 million equity forward and undrawn revolver, FCPT has capital to fund the announced pipeline while staying below its leverage threshold of 5.5x - 6.0x Net Debt / EBITDAre Well-positioned balance sheet to fund the $160.7 million of announced but not yet
Slide 13: FCPT Balance Sheet and Portfolio Create a Strong Platform for Growth
FCPT BALANCE SHEET AND PORTFOLIO CREATE A STRONG PLATFORM FOR GROWTH High quality portfolio of 650 properties diversified geographically and by concept across 45 states and 41 tenant brands Stable rental stream, 100% anchored with service retail tenants and 75% investment grade tenancy with long
Slide 14: Agenda
AGENDA Company Overview and Business Update Page 3 Key Investor Highlights Page 14 Appendix Page 20 14 | FCPT | OCTOBER 2019
Slide 15: Geographic Diversification
GEOGRAPHIC DIVERSIFICATION ND WA MT MN 650 Properties ME SD WI ID MI VT NH OR WY NY IA MA NE CT RI PA OH NV IL IN NJ UT CO MD 45 States DE KS MO WV KY VA CA OK TN NC Annualized AR Base Rent (%) NM AZ SC ≥10.0% 41 Brands MS AL GA 5.0%–10.0% LA TX 3.0%–5.0% 2.0%–3.0% 4.4 mm sq ft FL 1.0 %–2.0% <1.0% N
Slide 16: Lease Maturity Schedule
LEASE MATURITY SCHEDULE Long Term and Staggered Lease Maturities1 99.9% occupied2 as of 9/30/2019 Weighted average lease term of 11.5 years 15.6% Less than 4.0% of rental income 13.4% 13.9% 11.9% matures prior to 2027 11.5% 11.1% 7.9% 3.0% 3.2% 3.3% 0.7% 0.7% 0.7% 0.7% 0.6% 0.0% 0.2% 0.3% 0.7% 0.5%
Slide 17: Trading Metrics and Leverage for Selected Net Lease REITs
TRADING METRICS AND LEVERAGE FOR SELECTED NET LEASE REITS Price / 2020E AFFO Average: 19.5x 23.9x 23.0x 19.9x 19.7x 19.4x19.1x 18.8x 16.1x 15.1x Net debt + preferred / last quarter annualized EBITDAre Average: 5.3x 6.3x 5.6x 5.5x 5.4x 5.2x 5.2x 4.8x 4.7x 1 2 Source: Each company’s public filings as
Slide 18: FCPT's Portfolio Compares Favorably Across Major Metrics
FCPT’S PORTFOLIO COMPARES FAVORABLY ACROSS MAJOR METRICS Tenant EBITDAR/Rent Coverage 4.8x 3.5x Peer Average: 2.9x 2.6x 2.7x N/A N/A N/A ADC VEREIT Realty STORE Spirit National Retail FCPT % Investment Grade Tenants 75% 57% 49% 40% Peer Average: 38% 19% 25% N/A STOR NNN SRC VER O ADC FCPT __________
Slide 19: FCPT Debt Maturity Schedule
FCPT DEBT MATURITY SCHEDULE Predominantly Fixed Rate Debt with Staggered Maturities Staggered 5.1-year weighted (1) average term for notes/bonds Undrawn Revolver Capacity 84% fixed rate debt Unsecured Term Loan 3.7% weighted average cash interest rate Unsecured Notes Full availability on $250mm revo
Slide 20: Agenda
AGENDA Company Overview and Business Update Page 3 Key Investor Highlights Page 14 Appendix Page 20 20 | FCPT | OCTOBER 2019
Slide 21: Brand Diversification
BRAND DIVERSIFICATION FCPT Portfolio Brands Square Feet % of Square Feet % of Rank Brand Name Leases (000s) ABR(1) Rank Brand Name Leases (000s) ABR(1) 1 Olive Garden 302 2,577 55.7% 16 McDonald's 4 17 0.4% 2 Longhorn Steakhouse 106 590 15.1% 17 Wendy's 5 17 0.4% 3 Chili's 53 293 8.2% 18 Outback 3 1
Slide 22: FCPT Acquisition Philosophy and Underwriting Criteria
FCPT ACQUISITION PHILOSOPHY AND UNDERWRITING CRITERIA Acquisition Philosophy • Acquire nationally recognized branded restaurants that are well located with creditworthy lease guarantors • Purchase assets only when accretive to cost of capital • Increase diversification by targeting different brands,
Slide 23: Investment Opportunity Sourcing
INVESTMENT OPPORTUNITY SOURCING FCPT is principally building its acquisition pipeline through five channels: 1) Mall and Shopping Center Outparcels: FCPT has announced several portfolio transactions with mall and shopping center REITs and continues to work on replicating this strategy. The added com
Slide 24: Food & Beverage Among Most E-Commerce Resilient Retail Categories
FOOD & BEVERAGE AMONG MOST E-COMMERCE RESILIENT RETAIL CATEGORIES US eCommerce Penetration by Retail Category (2019) 60% 51% 50% 39% 40% 32% 31% 30% 26% 21% 20% 10% 10% 4% 2% 0% Books, Music & Computer & Office Equipment Toys & Hobby Apparel & Furniture & Home Health, Personal Auto & Parts Food & Be
Slide 25: Consumer Food Spending
CONSUMER FOOD SPENDING Consumers Spend More on Dining Than on Groceries $70 Grocery Stores Bars and Restaurants $60 $50 $40 $30 Total Sales (Billions) Total Eat Out at Least Once Per Week: $20 Millenials 49% Gen X 43% Boomers 35% $10 $0 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
Slide 26: Vast Addressable Market Within Restaurant Industry Subsectors
VAST ADDRESSABLE MARKET WITHIN RESTAURANT INDUSTRY SUBSECTORS US GDP – $19.4 Trillion Consumption Investment Government $13.4T $3.2T $3.4T Net Exports Retail Sales -$0.6T $5.7T Restaurants (~9.4% of Retail Sales, $535bn) Quick Family Fine Quick Service & Fast Casual Casual Dining Casual / Buffet Din
Slide 27: Rapid Franchisee Consolidation Creates Real Estate Opportunities
RAPID FRANCHISEE CONSOLIDATION CREATES REAL ESTATE OPPORTUNITIES IN RESTAURANT INDUSTRY Units Owned by the Top 200 Franchisees Average units per Top 200 Franchisees 141 28,109 7.3% CAGR 135 From 2011-2017 26,993 126 25,176 116 23,177 109 21,831 102 20,331 92 18,408 17,887 89 85 16,915 16,715 82 84 1
Slide 28: Thoughtful Brand Selection
THOUGHTFUL BRAND SELECTION Brand Average Sales Volume ($000s) $10,495 $6,000 Casual Dining $5,000 FCPT focuses on national brands Fast Casual with strong sales volumes and market appropriate rents $4,000 Quick Service $3,000 $2,000 $1,000 $0 FCPT pursues properties within the median range of Casual
Slide 29: Glossary and Non-GAAP Definitions
GLOSSARY AND NON-GAAP DEFINITIONS This document includes certain non-GAAP financial measures that measures may not be comparable to similarly titled measures maintain the operating performance of our properties, all of which management believes are helpful in understanding our business, as employed
Slide 30: Reconciliation of Net Income to Adjusted EBITDAre
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDARE ($000s, except shares and per share data) Three Months Ended September 30, Nine Months Ended September 30, Unaudited 2019 2018 2019 2018 Net Income $ 18,409 $ 17,607 $ 53,946 $ 61,595 Adjustments: Interest expense 6,665 4,934 19,969 14,667 Income tax
Slide 31: Four Corners Property Trust
FOUR CORNERS PROPERTY TRUST NYSE: FCPT INVESTOR PRESENTATION | OCTOBER 2019 www.fcpt.com 31 | FCPT | OCTOBER 2019
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